Fuel Task Force and MOMI signs MOU

Palikir, POHNPEI (FSM Information Services): July 11, 2007 - President Manny Mori announced today that the Federated States of Micronesia Fuel Task Force has signed a Memorandum of Understanding with Mobil Oil Micronesia, Inc. (MOMI) setting out the key terms of a purchase of MOMI's fuel terminals in the FSM, and for a new FSM-wide fuel supply agreement.

"There is now a doable deal on the table," said President Mori, "and it is up to the FSM to decide whether to take advantage of it."

The Fuel Task Force has been working since the late 1990's to secure less expensive fuel arrangements, and was instructed by national and state leadership in 2005 to investigate the acquisition of fuel facilities on behalf of the FSM.

Local ownership of fuel distribution infrastructure is widely believed to allow more competitive fuel pricing and is a model that has been increasingly followed by other Pacific Island nations, including Samoa and American Samoa.

Fuel Task Force representatives indicated that, with the signing of the Memorandum of Understanding, the role of the Task Force was drawing to a close, and that the leadership of the national government and each state would now need to consider the merits of the proposed transaction.

Cooperation among the four states and the national government has been cited as a key ingredient in securing competitively priced fuel, since it will allow the FSM to bring the combined purchasing power of all four states to market while achieving operational efficiencies.

Other issues to be dealt with will include the terms of any transition from MOMI to local operations. Fuel Task Force representatives have indicated that any transition would have to be professionally managed, with key issues being continuity of supply and the need to assure valuable Micronesian employees that they will have a place under the new ownership.